SanDisk (SNDK) Stock: Flash Storage Demand Powers Historic Earnings Surge

TLDR

• SanDisk reported Q2 revenue of $3.03 billion, crushing the $2.69 billion estimate, while profit jumped 672% to $803 million
• The stock surged 17% in pre-market trading and is up over 125% year-to-date on AI data center demand
• Q3 guidance shocked investors with $4.6 billion revenue forecast versus $2.9 billion expected and $14 EPS versus $5.11 estimated
• SanDisk extended its Kioxia supply partnership through 2034, adding nine years to secure flash chip production capacity
• Management said the company cannot meet current demand and expects supply constraints to continue through 2026

SanDisk shares rocketed 17% higher in pre-market trading Friday after the company delivered a blowout earnings report. The data storage company posted fiscal Q2 revenue of $3.03 billion, easily topping Wall Street’s $2.69 billion forecast.

The profit story was even more impressive. SanDisk earned $803 million, or $5.15 per share, marking a 672% increase from the same period last year. Analysts had projected adjusted earnings of only $3.33 per share.

Year-to-date, the stock has climbed more than 125%. The shares are now trading above the average analyst price target of $395.93.

Sandisk Corporation, SNDK

AI data centers are driving the surge. SanDisk provides flash storage memory that powers solid-state drives in these facilities. Data-center revenue jumped 76% year-over-year as AI companies raced to build infrastructure.

CEO David Goeckeler explained that AI firms are constructing specialized data centers for inference operations. These systems need vast amounts of stored data to answer user queries.

The tight supply situation is working in SanDisk’s favor. “Customers prefer supply over price,” Goeckeler told Reuters, highlighting how buyers are prioritizing availability over cost.

Supply Deal Secures Long-Term Capacity

SanDisk locked down its production pipeline for nearly a decade. The company extended its flash chip supply agreement with Japanese partner Kioxia Corp through 2034. The previous arrangement was set to expire in 2029.

“We have incredible capacity in Japan that we’ve been investing in, and we continue to invest in,” Goeckeler said. “Now we’re signed up together for another nine years.”

The partnership gives SanDisk access to joint venture manufacturing facilities in Japan. This ensures stable production as AI demand continues climbing.

Management admitted the company couldn’t fulfill all current orders. This supply-demand gap is expected to persist into 2026, supporting continued pricing strength.

Guidance Doubles Wall Street Expectations

SanDisk’s forward outlook stunned the market. The company forecast Q3 revenue with a $4.6 billion midpoint, nearly double the $2.9 billion analysts expected.

Profit guidance was equally aggressive. SanDisk projects adjusted earnings between $12 and $14 per share. Wall Street had been modeling just $5.11 per share, representing a gap of more than 150%.

The forecast signals that AI-driven growth is accelerating. While much attention has focused on DRAM memory chips, flash storage demand is now surging alongside broader AI infrastructure buildouts.

Operating margins are expanding as production scales up. The massive profit increase shows SanDisk is converting revenue gains into earnings growth.

Wall Street maintains a Moderate Buy rating on the stock, with 10 Buy recommendations and four Hold ratings over the past three months. These ratings will likely be revised following the latest results.

The extended Kioxia agreement runs through 2034, securing nine additional years of flash chip supply for AI data center expansion.